Question # 1

Marginal product curve intersects average product curve when AP curve is

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minimum

maximum

rising

falling

Law of diminishing returns is a universal law as:

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It does apply in all aspects of an economy.

Basically it applies in agriculture.

It is hard to check it.

It applies in industry as well

When a firm using a fixed amount of land and capital takes on more workers, it finds that marginal product(MP) of labour falls but the average product(AP) of labour rises. This can be explained by the factors that

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MP of labour is grater than AP of labour

additional workers are more efficient

MP and AP are equal

AP is maximum

Marginal product indicates rate of change of

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total product

average product

variable product

all of the above

Law of decreasing returns generates

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law of economic growth

law of increasing costs

law of variable costs

law of decreasing costs

The law of variable proportions was presented by.

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Jevens

Rayon

Hicks

Valentine

When average product (AP) and marginal product (MP) are rising.

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AP > MP

AP = MP

AP < MP

AP = MP = 0

When average product falls marginal product

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Rises

Also falls

Remain equal to average product

Does not change

In the second stage of the law of variable of proportions the average product:

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Rises

Remains constant

Falls

None of the three

Economics of scale are of two kinds

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temporary and permanent

internal and external

managerial and industrial

natural and artificial

Which one will determine scale of production .

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Financial resources

Production techniques

Extant of the market

All the above

Commercial economics are a pat of:

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Internal economics

External economics

Economies of scale

None of the three

When MP is zero, TP is

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minimum

maximum

rising

falling

Laws of return apply to firms working in

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perfect competition

monopoly

small firm

all kinds of market situations

In law of diminishing returns at least one factor

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must be constant

must be owned by the firm

must be purchasable

must be efficient

Which one is the third stage of production under law of variable proportions

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Decreasing average returns

Increasing average return

Negative marginal return

Increasing marginal return

The maximum point of TP curve is at quantity of labour where

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Average physical product of labour is equal to 1

MPP of labour is at its maximum

curves of APP and MPP of labour intersect

MPP of labour is zero

The government constructed a new water reservoir for the purpose of irrigation; this might be taken as

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increase in supply of capital

increase in supply of land

increase in supply of land and supply of capital

none of these

When total product rises marginal product.

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Remains the same

Falls

Also rises

None of the three

An important factor which promotes large scale production is:

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Extant of market

Revolutionary changes in social life

Culture and civilization

All the three

Which of the following is example of external economies of scale?

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Discount on purchases of raw materials

Technical progress leads to development of machines at low price

Hiring of specialized staff due to increase in scale of production

A firm starts producing by products

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